Sugar Marketing Assessments

DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1435

RIN 0560-AC91

Sugar Marketing Assessments

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Final rule.

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SUMMARY: The proposed rule on sugar marketing assessments, published

December 31, 1992, (57 FR 62486) is adopted as final, with certain

changes as required by amendments made by the Omnibus Budget

Reconciliation Act of 1993 (Reconciliation Act) to the Agricultural Act

of 1949 (1949 Act). This final rule reflects changes required by

amendments to the statutory provisions which authorize the assessments,

clarifies the regulations, and enhances the collection of the

assessments.

EFFECTIVE DATE: September 9, 1994.

FOR FURTHER INFORMATION CONTACT: Robert D. Barry, Director, Sweeteners

Analysis Division, Agricultural Stabilization and Conservation Service,

room 3739, South Agriculture Building, U.S. Department of Agriculture,

P.O. Box 2415, Washington, DC 20013-2415; telephone: 202-720-3391.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This final rule is issued in conformance with Executive Order

12866. OMB has determined that this rule is significant.

Regulatory Flexibility Act

The Executive Vice President, Commodity Credit Corporation (CCC),

certifies that this final rule will not have a significant economic

impact on a substantial number of small entities. Consequently, a

Regulatory Flexibility Analysis is not required under the provisions of

the Regulatory Flexibility Act.

Executive Order 12778

This final rule has been reviewed in accordance with Executive

Order 12778. The provisions of this final rule do not preempt State law

to the extent such laws are not inconsistent with the provisions of

this final rule. This final rule is not retroactive. Before any action

may be brought regarding the provisions of this final rule, the

administrative appeal rights set forth at 7 CFR part 780 must be

exhausted.

Environmental Evaluation

It has been determined by an environmental evaluation that this

action will not have a significant impact on the quality of the human

environment. Therefore, neither an Environmental Assessment nor an

Environmental Impact Statement is needed for this final rule.

Paperwork Reduction Act

This final rule does not impose new information collection or

recordkeeping requirements on the public. The information collection

requirements of the current rule at 7 CFR Part 1435 have been approved

through July 31, 1995, by the Office of Management and Budget (OMB)

under the provisions of the Paperwork Reduction Act of 1980 (44 U.S.C.

Chapter 35) and has been assigned OMB No. 0560-0138.

Executive Order 12372

The program covered by this final rule is not subject to the

provisions of Executive Order 12372 which requires intergovernmental

consultation with State and local officials. See the notice related to

7 CFR part 3015, subpart V, published at 48 FR 29115 (June 24, 1983).

Background

Section 1105(c) of the Omnibus Budget Reconciliation Act of 1990

amended section 206(i) of the 1949 Act to provide that, only for the

1991 through 1995 crops of sugarcane and sugar beets, the first

processor of sugarcane or sugar beets shall remit to CCC a

nonrefundable marketing assessment in an amount equal to 0.18 cents per

pound of raw cane sugar processed by the processor from domestically

produced sugarcane and an amount equal to 0.193 cents per pound of beet

sugar processed by the processor from domestically produced sugar

beets. The amendment also provided for the imposition of civil

penalties if any persons were to fail to remit such assessments or to

comply with such requirements for recordkeeping which are required to

carry out section 206(i).

Because the 1991 crop year was to begin on July 1, 1991, an interim

rule was promulgated to implement these assessments, which became

effective on June 19, 1991 (56 FR 28034). Based on consideration of the

comments received, a final rule was promulgated effective on November

1, 1991 (56 FR 55606).

Subsequently, the Food, Agriculture, Conservation, and Trade Act

Amendments of 1991 (the 1991 Act, also known as the technical

corrections to the 1990 Farm Act), which became effective on December

13, 1991, amended section 206(i) of the 1949 Act, to:

(1) Provide that the assessments would apply only for marketings of

raw cane sugar and beet sugar during the 1992 through 1996 fiscal

years,

(2) Specify the timing of collections of marketing assessments, and

(3) Clarify that the assessments would apply to sugar derived from

sugar beet molasses or sugarcane molasses.

A proposed rule was promulgated on December 31, 1992 (57 FR 62486)

to reflect the statutory amendments enacted in the 1991 Act and, at the

same time, to ease the regulatory burden of the assessments and to

further clarify certain provisions of the regulations.

Section 1107 (a) of the Reconciliation Act (Pub. L. 103-66), which

became effective on August 10, 1993, amended section 206 of the 1949

Act, to provide that:

(1) Assessments would apply to the marketings of raw cane sugar and

beet sugar for two additional fiscal years, through fiscal 1998,

(2) The assessments for fiscal years 1995 through 1998 would be 10

percent higher per pound of sugar than assessments for fiscal years

1992 through 1994, and

(3) Processors who knowingly market sugar in excess of the

allocation of the processor shall pay an assessment which is double the

applicable assessment required per pound of sugar marketed.

In this final rule, CCC is adding amendments to the regulations to

reflect the statutory amendments enacted in the Reconciliation Act.

Summary of Comments

One national and two State sugar associations commented on the

proposed rule. All three were critical of Sec. 1435.203(e) which

requires remitting the marketing assessment fee by October 30 on the

quantity of sugar produced during the preceding fiscal year but not

marketed by September 30. Even though such sugar would not be subject

to a second assessment when it is marketed, the payment on sugar

inventories was considered an unfair burden on the processors. Two of

the commenters recommended that the marketing assessment should be

imposed only when the sugar is actually marketed, except that in the

last fiscal year (fiscal 1998), any (1991- through 1997-crop) sugar not

marketed by September 30, would be subject to the marketing assessment

fee. Regardless of the merits of the recommendation, CCC is required by

statute to implement Sec. 1435.203(e) as written in the proposed rule

and therefore adopts the section as final. The third commenter agrees

that current statutes uphold the need for Sec. 1435.203(e), but asks

CCC to acknowledge the inequity and thereby pave the way for remedial

legislation.

One commenter contended that Hawaiian producers should be permitted

credit for assessments paid on sugar processed during July 1 through

September 30, 1991 ``as was done for beet processors.'' CCC addressed

this issue extensively in the proposed rule and maintains that the

assessment rules were applied consistently among all processors, both

beet and cane.

Thus, CCC adopts the provisions as provided in the proposed rule,

except for revisions to Secs. 1435.200, 1435.202, and 1435.204 to

reflect statutory requirements of Sec. 1107 (a) of the Reconciliation

Act.

List of Subjects in 7 CFR Part 1435

Loan programs/agriculture, Marketing allotments, Price support

programs, Reporting and recordkeeping requirements, Sugar.

Accordingly, 7 CFR part 1435 is amended as follows:

PART 1435--SUGAR

1. The authority citation for 7 CFR part 1435 continues to read as

follows:

Authority: 7 U.S.C. 1359aa-1359jj, 1421, 1423, 1446g; 15 U.S.C.

714b and 714c.

2. Subpart--Sugar Marketing Assessments, consisting of

Secs. 1435.200-1435.206, is revised to read as follows:

Subpart--Sugar Marketing Assessments

Sec.

1435.200 General statement.

1435.201 Definitions.

1435.202 Amount of the marketing assessment.

1435.203 Remittance.

1435.204 Civil penalties and interest.

1435.205 Maintenance and inspection of records.

1435.206 Refunds.

Subpart--Sugar Marketing Assessments

Sec. 1435.200 General statement.

(a) This subpart sets forth the terms and conditions for the

payment to CCC of marketing assessments for beet sugar and raw cane

sugar produced during the 1991 through 1997 crop years and marketed

during the 1992 through 1998 fiscal years.

(b) The marketing assessment applies to: (1) The marketing by first

processors of all raw cane sugar produced from the 1991 through 1997

crops of domestically produced sugarcane or sugarcane molasses and

marketed during the 1992 through 1998 fiscal years; and

(2) The marketing by first processors of all beet sugar produced

from the 1991 through 1997 crops of domestically produced sugar beets

or sugar beet molasses and marketed during the 1992 through 1998 fiscal

years.

(c) All first processors of sugar beets and sugarcane are

responsible to remit the marketing assessments.

(d) The marketing assessments shall be due and payable to CCC by

the thirtieth calendar day following the end of the month in which the

beet sugar or raw cane was marketed.

Sec. 1435.201 Definitions.

Beet sugar means sugar, whether or not principally of crystalline

structure, which is processed directly or indirectly from domestically

produced sugar beets (including sugar produced from sugar beet

molasses).

Crop year and crop shall have the same meanings as are ascribed to

such terms in Sec. 1435.3 of this part, with the customary allowance

for a continuous harvest as provided for in Sec. 1435.5(a)(2) of this

part. In addition, beet sugar or raw cane sugar processed from molasses

or thick juice produced from domestically produced sugar beets or

sugarcane shall be considered to have been produced during the crop

year in which such sugar beets or sugarcane was harvested.

First processor means a person who commercially produces beet sugar

or raw cane sugar, directly or indirectly, from domestically produced

sugar beets or sugarcane, or from molasses or thick juice derived from

domestically produced sugar beets or sugarcane.

Fiscal year means CCC's fiscal year which runs from October 1 to

September 30.

Integrated processor-refiner means a first processor of raw cane

sugar who also refines raw cane sugar into refined sugar.

Market or marketing means the sale or disposition of raw cane sugar

or beet sugar in commerce in the 50 United States, the several

territories, the District of Columbia, and Puerto Rico, including, with

respect to any integrated processor-refiner, the movement of raw cane

sugar into the refining process. For purposes of this subpart, the

forfeiture to the CCC of raw cane sugar or beet sugar used as

collateral for a price support loan is also considered a marketing.

Raw cane sugar means any sugar, cane syrup or edible molasses,

whether or not principally of crystalline structure, processed from

domestically produced sugarcane or sugarcane molasses.

Raw value shall have the same meaning as is ascribed to such term

in Sec. 1435.401 of this part.

Sec. 1435.202 Amount of the marketing assessment.

(a) The amount of the beet sugar marketing assessment to be

remitted shall be the sum determined by multiplying the number of

pounds of beet sugar marketed in a calendar month by the assessment

rate. The assessment rate for fiscal years 1992 through 1994 shall be

1.0722 percent of the loan level for raw cane sugar, but not more than

0.193 cents per pound. For marketings during each of fiscal years 1995

through 1998, the assessment rate per pound of beet sugar shall be

1.1794 percent of the loan level established for raw cane sugar, but

not more than 0.2123 cents per pound of beet sugar.

(b) The amount of the marketing assessment on raw cane sugar to be

remitted to CCC shall be the sum determined by multiplying the number

of pounds, raw value, of raw cane sugar marketed, or estimated to be

marketed in accordance with Sec. 1435.203(c)(1) of this subpart, in a

calendar month by the assessment rate. The rate for fiscal years 1992

through 1994 shall be 1.0 percent of the loan level for raw cane sugar,

but not more than 0.18 cents per pound. For marketings during each of

fiscal years 1995 through 1998, the assessment rate per pound of raw

cane sugar shall be 1.1 percent of the loan level established for raw

cane sugar but not more than 0.198 cents per pound of raw cane sugar.

Sec. 1435.203 Remittance.

(a)(1) First processors shall remit marketing assessments to CCC by

the thirtieth calendar day following the end of the month in which the

beet sugar or cane sugar subject to the assessment was marketed.

(2) Mailed remittances will be considered timely if they are

postmarked not later than the thirtieth calendar day following the

month in which the beet sugar or cane sugar subject to the assessment

was marketed.

(3) Electronic remittances must be received by CCC by the thirtieth

calendar day following the month in which the beet sugar or cane sugar

subject to the assessment was marketed.

(4) Any processor who fails to file a remittance by the date on

which it is due shall be assessed a civil penalty and interest in

accordance with Sec. 1435.204 of this subpart.

(b)(1) First processors shall prepare and submit a fully and

accurately completed form CCC-80 each month that shows the quantity of:

(i) Beet sugar marketed during the previous calendar month, and

(ii) Raw cane sugar, raw value, marketed during the previous

calendar month.

(2) First processors who do not operate on a calendar month basis

may pay their assessments based on marketings that include several

extra days or fewer days than the calendar month reporting period,

consistent with the processor's standard accounting months. However:

(i) Assessments must be paid on all marketings of specific crop

year sugar in the fiscal year it is due, and

(ii) The marketing assessments must be remitted monthly and by the

dates specified in paragraph (a) of this section.

(3) The entire assessment that is due and payable shall be remitted

with the Form CCC-80.

(c)(1) If, when a raw sugar assessment is due and payable, the

first processor cannot determine the exact raw value of such sugar, an

estimate of raw value based on the recent experience of the processor

shall be made and the assessment submitted on the estimated quantity.

(2) Whenever an assessment is based on an estimate of raw value

pursuant to paragraph (c)(1) of this section, any necessary adjustments

to the quantity of raw sugar subject to the assessment shall be made by

filing a corrected CCC-80 no later than 30 calendar days after the last

day of the month in which the estimated assessment was paid. If,

according to the corrected CCC-80:

(i) The assessment was underpaid, the first processor shall remit

the additional assessment due with the corrected CCC-80, and

(ii) If the assessment was overpaid, the first processor shall

subtract the overpayment from any assessment due at the time the

corrected CCC-80 is filed, or if none is due at that time, from the

assessment next due.

(d) Any first processor, who paid an assessment on beet sugar or

raw cane sugar processed during the first three months of the 1991 crop

year (July 1 through September 30, 1991) and then paid another

assessment upon the marketing of the same sugar after September 30,

1991, may receive a credit for any assessment paid on such sugar prior

to fiscal year 1992. The credits will be handled by procedures to be

developed by the Controller, CCC.

(e) By October 30 of each year, first processors shall determine

the quantity of beet sugar or raw cane sugar on hand that was produced

during the preceding fiscal year but not marketed by September 30 of

such preceding fiscal year and shall remit a marketing assessment to

CCC as if the sugar had been marketed in September of such preceding

fiscal year. Such sugar shall not be subject to a second assessment

when it is marketed.

(f) First processors shall send remittances and CCC-80 forms as

specified by CCC.

Sec. 1435.204 Civil penalties and interest.

(a) A first processor shall be liable for a civil penalty of up to

100 percent of the relevant national average price-support loan rate

times the quantity of raw cane sugar or beet sugar involved in the

violation if the processor:

(1) Fails to remit, on a timely basis, the entire amount of any

marketing assessment in accordance with this subpart;

(2) Fails to submit form CCC-80 fully and accurately completed; or

(3) Fails to maintain and permit inspection of records as required

by Sec. 1435.205 of this subpart.

(b) Also, a processor who knowingly markets sugar in excess of the

allocated allotment of the processor under section 359d of the

Agricultural Adjustment Act of 1938 shall pay an assessment in an

amount that is double the applicable assessment required under

Sec. 1435.202 of this subpart.

(c) In addition to any civil penalty assessed in accordance with

paragraphs (a) and (b) of this section, interest on unpaid assessments

or deficiencies in assessments paid shall be due and payable at the

rate specified in part 1403 of this chapter, beginning on the first day

of the month after the marketing assessment was due in accordance with

Sec. 1435.203 of this subpart. Such interest shall continue to accrue

until such amount is paid. However, if full payment of an assessment is

received within 30 calendar days of the date on which the assessment

was due, no interest shall apply.

(d) The Controller, CCC, shall assess civil penalties and interest.

(e) Affected first processors may appeal civil penalties by filing

a notice of appeal within 15 calendar days of receipt of certified

written notification by the Controller, CCC, of such assessment of

civil penalties. Such notice of appeal shall be sent to the Director,

National Appeals Division, ASCS, P.O. Box 2415, Washington, DC 20013-

2415.

Sec. 1435.205 Maintenance and inspection of records.

Representatives of CCC shall have the right to have access to the

premises of the first processor in order to inspect, examine, and make

copies of the books, records, accounts, and other data as are deemed

necessary by CCC or CCC's agents to verify compliance with the

requirements of this subpart. Such books, records, accounts, and other

written data shall be retained by the first processor for not less than

three years from the date the remittance is made to CCC.

Sec. 1435.206 Refunds.

Marketing assessments are nonrefundable. However, upon presentation

of evidence acceptable to the Controller, CCC, adjustments to an

assessment may be made by CCC to reflect the actual marketings of beet

sugar or raw cane sugar, or a first processor may adjust the amount of

the assessment due in accordance with Sec. 1435.203 of this subpart.

Signed at Washington, DC, on July 20, 1994.

Bruce R. Weber,

Acting Executive Vice President, Commodity Credit Corporation.

[FR Doc. 94-19630 Filed 8-10-94; 8:45 am]

BILLING CODE 3410-05-P